Health insurance is expiring and I haven't really done my homework

October 17, 2010 6:35 PM

I'm a 23 y/o male, living back and forth in PA and NJ. I'm looking to buy my own health insurance of some persuasion, and I need lots of advice. I have no known health issues, and I've been slightly underemployed as of late. Thanks!

Background: In a few weeks, I'm going to lose my health insurance (PPO). My parents are retired and pay for their coverage through COBRA. To date they have (generously) paid for my plan as well, but they're no longer able to do so. As far as I know, Obamacare reforms (specifically coverage for older children) will not benefit me.

I am 23 with a BA in Linguistics (a whole other question, someday). I am employed, but my job doesn't offer benefits (and is frankly something that was intended to be slightly shorter-term). I am (as far as I know) in good health with no pre-existing conditions. I'm planning to buy my own coverage, probably something with a big deductible but that will still protect me from financial ruin if something truly shitty should happen. My permanent address is in my home state (New Jersey), but I live in Pennsylvania. Rates are much lower in PA, so I'm planning to establish residency here.

Question 1: While I still have doctor visits covered, I thought I might as well make an appointment for a check up, etc. My mother suggested that I wait until I'm no longer covered and pay for the appointment by myself. She claims that if (obligatory god-forbid) some health issue were discovered, my rates would soar and my life would become much more difficult. How true is this? How does this logic apply to PA versus NJ? I believe that NJ has laws against pre-existing condition discrimination, but I don't know how accurate of a picture this is.

Question 2: According to my research, I don't apply for any sort of government benefits. Are there perhaps any details I might be overlooking that would indicate otherwise?

Question 3: Should I investigate temporary policies?

Question 4: Is there anything else I should consider? Any appointments I should make, people whom I should speak with, places I should contact? Advice, lectures, marriage/domestic partner candidates are all welcome!

Thanks in advance for your help!

(tl;dr I don't know how to proceed with getting my own health insurance policy)

posted by null14 to health & fitness (6 answers total)

Double-check that Obamacare doesn't apply to you by talking to your parent's HR. I'm going back on their insurance the next quarter. Have you checked Healthcare.gov?

Until then, I've purchased temporary insurance through my University's alumni association. I know they also had more permanent policies available.
posted by just.good.enough at 6:55 PM on October 17, 2010

I don't understand your mother's logic. Is she saying that you should try to have this checkup off the record and, if something is discovered, try to prevent your new insurer from finding out about it? That sounds like a recipe for disaster--both illegal (insurance fraud) and tough to execute so that the company wouldn't find out ever. Or does she mean that you should wait until you've already bought your own individual coverage before having a checkup?

It also sounds like you're planning to have a period of time with no insurance. Before you do that, read about "creditable coverage" (this is an official term) and gaps and pre-existing conditions and whether past continuous creditable coverage matters in your state if you're buying an individual plan. In some situations, being uninsured for a bit can interfere with getting coverage for pre-existing conditions (i.e. if you have a medical issue crop up but have always had insurance or haven't had a significant gap in coverage, it will be easier to have your next insurer cover treatment for that issue.) Disclaimer: I'm just throwing out these as specific areas to look into - I am not familiar with NJ or PA insurance laws.
posted by needs more cowbell at 12:47 AM on October 18, 2010

Just to make things clear, my mother suggested that I wait until I've bought my own individual coverage to see a doctor. Is this totally backwards?
posted by null14 at 1:47 AM on October 18, 2010

From my own experience, if you go to the doctor now and they find something like high blood pressure, a new company may decline to insure you. If you feel healthy, you could wait until you activate your new policy and then go in for your physical. The policy I looked into had a three month waiting period before you could go in for any preventive care, but that's not that long and at that point you have coverage.

Oh, all the applications ask about any lapses of more than six month coverage. I’m not sure how that affects rates or coverage, but I’m sure it’s not positive.
posted by iscavenger at 6:44 AM on October 18, 2010

Question 1: While I still have doctor visits covered, I thought I might as well make an appointment for a check up, etc. My mother suggested that I wait until I'm no longer covered and pay for the appointment by myself. She claims that if (obligatory god-forbid) some health issue were discovered, my rates would soar and my life would become much more difficult. How true is this? How does this logic apply to PA versus NJ?

You're right that New Jersey prevents health insurance companies from using information about pre-existing conditions in pricing insurance, so if you were planning on living in NJ and buying insurance there your mom's suggestion wouldn't make any sense. However, one downside to this type of state rule for health insurance (called guaranteed issue) is that it makes policies pretty expensive for healthy young people--as you've discovered already. Since you're planning on living in Pennsylvania and buying insurance there, you need to educate yourself on how consumer protections work there. This guide is an excellent, excellent place to start.

I'd be less concerned about soaring rates and much more concerned about being able to buy insurance at all if you discover a health problem before securing your own insurance--even for something innocuous like hay fever. (Seriously, the list of things that can make you uninsurable in the eyes of insurance carriers is broader and more trivial than you probably imagine.) It looks like Blue Cross Blue Shield plans in Pennsylvania have to offer to sell you at least one plan, no matter how sick you are or what pre-existing conditions you have. However, that one plan can exclude coverage for a pre-existing condition--that is, any treatment that was recommended or actually provided to you within the past 5 years--for up to 36 months. Other plans that you might buy are allowed to exclude coverage for a condition entirely over the life of the contract. Given that, I think your mom's advice to avoid getting a physical until you have your own insurance might make sense, as long as you don't have any worrying symptoms that you're concerned about now.

Question 2: According to my research, I don't apply for any sort of government benefits. Are there perhaps any details I might be overlooking that would indicate otherwise?

If you're a healthy 20-something dude with no kids and no serious physical limitations, I'm not surprised you don't qualify for gov't assistance. But that's good! It means you're healthy, and have a decent shot at buying your own insurance until the new health care laws (and subsidies) kick in on January 1, 2014.

The only thing it doesn't look like you're considering is continuing your coverage on your parents' insurance, but paying them enough to cover your part of the premium. Have you considered this? It might be a moot point if you're moving to another state, but depending on how good that insurance is and how healthy the pool of workers is that it covers, this option might make financial sense. At least look into it.

Question 3: Should I investigate temporary policies?

No. Absolutely not. This is a terrible idea. The whole point of insurance is to provide yourself protection against the risk of dying for lack of medical care or (the more rosy scenario) going bankrupt from medical bills in the event of a catastrophic illness or injury. The "insurance" that you are buying with a temporary policy is not really insurance in that sense, because (unlike other, regular health insurance) they will drop you at the end of 6 months or 12 months when your policy expires, and you'll be boned. This is the very definition of "penny-wise but pound-foolish."

Again: stay away from temporary policies.

Question 4: Is there anything else I should consider? Any appointments I should make, people whom I should speak with, places I should contact? Advice, lectures, marriage/domestic partner candidates are all welcome!

Read through the link I provided above for some basic information about how the individual market works in Pennsylvania, and what protections you have (or don't have). Look through the Yellow Pages for an insurance broker, call one up, and make an appointment to go in and talk with them; it's free to you (they get a commission from the insurance company after selling you a policy) and they should have a good grasp of what sorts of policies are out there and what you will qualify for.
posted by iminurmefi at 12:22 PM on October 18, 2010 [1 favorite]

Oh! And let me give you the advice/lecture that I really want to give to every person looking for the mythical $50/month comprehensive health insurance (with mental health benefits covering weekly CBT, of course) that will let you see any doctor you want, and comes posting to AskMe for advice on how to find that unicorn:

Keep your eye on the big picture of why you're buying health insurance. This is good advice for everyone, but particularly good advice for people with limited funds to procure health insurance, because you're going to have to compromise somewhere and it's really, really important that you do so in an area that actually makes sense. You want to be protected (financially and in the sense of actually being able to get care) in case the low-probability but high-cost catastrophy happens, so pay attention to how each potential plan you're looking at would work in *that* situation--and not so much at how it's going to work in the more common but lower-cost situations like going in for an annual physical. This is the #1 mistake that I think people make, getting all hung up on "how much of my current medical costs will this policy cover?" while totally ignoring "how much of the costs would this insurance cover if I get very, very sick?"

The list of things that I would look at, personally, if I were buying individual insurance (from most important to least important):

1. Benefit package. Does this policy cover the treatments that I might need in the event of serious illness or injury? Does it cover chemotherapy? (Not all "basic" plans do.) Does it cover prescription drugs? (This can get really, really expensive for the newer cancer drugs.) Does it have any sort of cap on inpatient days, or surgeries? If I'm seriously injured, what sort of physical rehabilitation is covered, and is there a limit per year on the number of visits I could have with a physical therapist?

2. Annual out-of-pocket maximum. For all the services covered under the benefit package, what is the absolute most I would be on the hook for if the worst happened--and could I afford that, between my emergency fund and borrowing money from my family? What if I got badly injured in December, and my treatment lasted through January--could I afford to pay the annual out-of-pocket maximum for two years in the space of two months?

3. Provider network. Is the hospital in my area included in the network, or am I going to have to drive an hour away to get treatment if I get really sick? Are there enough doctors in-network in my area to actually get seen if I need to? (This can be a bit hard to judge, but I think an insurance broker might be able to give you a sense of which plans have such a limited network that people can't find doctors.) I don't think that I need total freedom to pick any doctor I want to see, or even the doctors that end up on the local lifestyle mag's list of "Best Dermatologists in Denver," but I want to know that I would be able to access healthcare within a reasonable distance if I became ill and needed to go in every few days for treatment.

4. Annual deductible. For all the services covered under the benefit package, how much do I have to pay out-of-pocket before my insurance starts kicking in anything? Is this something I could afford? Keep in mind, even before you meet your deductible, you're getting the discounts that your insurer has negotiated with doctors and hospitals, so you do get a "benefit" from being insured before your insurer pays a penny.

5. Cost-sharing and copays for typical visits. Is it $10 or $50 to go to the doctor for my annual well-woman exam, or when I get sick? (This is only going to really come into play if every item above is equal between two plans. I'd take the plan with the $50 copay but better benefit package in a heartbeat before the plan with the $10 copay that doesn't cover prescription drugs, or has a larger annual out-of-pocket maximum, and so on.)

Good luck. In all probability, you'll never need to use this insurance for anything serious; the vast majority of people are pretty satisfied with whatever coverage they have, because 80 percent of people use very, very little care in any given year. You just want to make sure that you are choosing wisely in case you end up in the group that does have big medical expenses.
posted by iminurmefi at 12:49 PM on October 18, 2010 [3 favorites]